Google Inc said that it expects the rates that companies pay for search ads on mobile phones could surpass the rates of its existing PC-based ad business thanks to the growing popularity of powerful smartphones. Google Engineering Vice President Vic Gundotra did not say when he expected the crossover in the so-called cost per click of its search ads to occur, during a webcast to analysts about the company’s mobile business on Monday. But he said that mobile ad rates have increased “dramatically” in recent years. And he noted that the number of Google searches on mobile phones have increased five-fold in the last two years. “We hope and believe that there’s even a chance that we could exceed desktop in the future,” Gundotra said in reference to the cost per click of mobile ads. He cited the availability of technology, such as the GPS data that can tell Google a phone user’s physical whereabouts, as helping the company create more “relevant” online ads.

Google, the world’s No.1 Internet search engine with $23.7 billion in 2009 revenue, has stepped up its mobile efforts as consumers increasingly access the Web from smartphones like Apple Inc’s iPhone. Google offers its own Android operating system that handset manufacturers like Motorola Inc and HTC use in their devices, and in January, Google began selling the Nexus One phone directly on its Web site. In November, Google announced plans to acquire mobile advertising firm AdMob for $750 million, though the deal is currently facing regulatory review. The mobile briefing comes as Google is in a standoff with China, the world’s largest Internet market by users, over the future of its Internet search website in the country. Google has said it will no longer censor search results in China, a move that some analysts believe could mean the end of its Chinese language web site Google.cn. Asked what the search situation might mean for Google’s mobile plans in China, Google CFO Patrick Pichette said on the webcast on Monday that Android was an “open source” platform that’s available to everybody and that the company thought China represented “another great market in which Android should flourish.”

Google put on a webcast with analysts Monday to tout its grand plans for mobile.

Google Engineering Vice President Vic Gundotra predicted that the rates companies pay for search ads on mobile phones would overtake rates they pay on the desktop because of the growing popularity and adoption of so-called smart phones that deliver a better browsing experience and simpler data plans.

“Google has bet big on mobile,” Gundotra said. Google is not just making “mini versions” of desktop applications but is rethinking applications and delivering new ones, he said.

In recent years, Google has seen mobile advertising rates increase dramatically, Gundotra said. The number of Google searches on mobile phones has increased fivefold in the last two years. He also noted that GPS and other features that broadcast a user’s whereabouts are helping Google create more relevant online ads.

The briefing came as Google awaits the outcome of a regulatory review of its proposed acquisition of mobile advertising firm AdMob. Google originally said it planned to buy the firm in November.

“We continue to be impressed with AdMob,” Gundotra said.

Making the leap from desktop to phone is crucial for the Internet giant, which dominates search advertising. The era of mobile advertising has arrived, Gundotra said.“The industry trends are blowing in Google’s favor,” he said.

CEO Eric Schmidt has already declared that Google is a “mobile first” company.

IDC analyst Karsten Weide estimates that, combined, Google and AdMob have 21% market share of mobile advertising. But he downplayed the significance of that lead.

“Google is the single most overestimated company in the industry,” Weide said. “So far it’s still a one-trick pony. Mobile is so new and so volatile. That does not mean that Google is going to be the ruler of the mobile universe.”

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If Apple was expecting Nokia to back down and retract its patent lawsuit after Apple countersued, apparently Nokia didn’t get the memo. Nokia has launched a fresh assault, filing a new complaint with the United States International Trade Commission (ITC) alleging that virtually every product Apple makes violates seven patents held by it.

In the ITC complaint, Nokia asks that the ITC investigate technologies used by Apple. Nokia accuses Apple of violating the seven patents in developing key elements of its products including the user interface, antenna, and power management.

Nokia drew first blood in the ongoing legal wrangling–filing a lawsuit claiming that Apple is in violation of as many as ten patents held by Nokia, which Nokia claims 40 other companies are currently paying licensing fees for. Apple responded by countersuing, alleging that Nokia is infringing on patents held by it as well–or instead–or both.

While Nokia is the leader in mobile phone and smartphone market share globally, it has struggled and continue to lose market share–much of which is being picked up by Apple’s iPhone. The initial challenge from Nokia was seen by many as an attempt to try and squash competition from the iPhone and cash in on its popularity by trying to get Apple to pay royalties for use of the technologies in question.

If Apple is, in fact, infringing on Nokia patents, Nokia certainly has a right to compensation, though. Nokia claims to have invested nearly $90 billion over the past 20 years on research and development for these and other patented technologies, and other companies–Apple included–should not be able to ride on Nokia’s research and development without fair compensation.

Often, cases like this involve each party escalating the suits and countersuits until the root issue is lost in the legal morass and eventually the two reach a settlement. Perhaps some money exchanges hands. A cross-licensing agreement is entered into where they agree to share each other’s allegedly infringed technologies, and nothing much changes in the grand scheme of things.

If either Nokia or Apple actually ride this horse to the finish line, though, and successfully win a judgment against the other, there could be significant implications in terms of the financial impact. The dispute could involve hundreds of millions of dollars in annual royalties which would certainly pad the winner’s bottom line while reducing the profits of the losing party.

Research In Motion Ltd. said Thursday afternoon that earnings surged 59% for the third fiscal quarter as sales of the company’s BlackBerry line of smartphones continued to grow, despite heavy competition.

The wireless device maker’s shares jumped more than 12% in after-hours trading — giving a lift to a stock that had sold off more than 20% since the company’s last earnings report. The results managed to surpass Wall Street’s expectations, and the company’s forecast for the current period also beat analysts’ estimates.

“RIM’s numbers look great, especially in the guidance,” said Tavis McCourt of Morgan Keegan. “Nothing dramatic seems to be happening to the margins.”

RIM said net income for the period ended Nov. 30 came in at $628.4 million, or $1.10 per share, compared with net income of $396.3 million, or 69 cents a share, for the same period the previous year.

Revenue grew 41% to $3.92 billion for the quarter.

Analysts were expecting the company to report earnings of $1.04 per share on revenue of $3.78 billion, according to consensus estimates from FactSet Research.

The BlackBerry remains one of the strongest product lines in the fast-growing smartphone business, but RIM is coming under more pressure from competitors. The iPhone from Apple Inc. and new devices from Motorola Inc. , HTC and Samsung feature the Android operating system developed by Google Inc. that is gaining ground in the market.

Analysts in particular were worried that the company would be unable to hold its prices, due to competition from new devices such as the Motorola Droid.

“I would say that rumors of death have been greatly exaggerated,” said Shaw Wu of Kaufman Bros. “It looks like the Droid is definitely not having as much of an impact as everyone thinks.”

RIM said it shipped 10.1 million smartphone units during the quarter, with net new subscribers coming in at 4.4 million. Analysts were expecting 4.1 million new subscribers with shipments of 9.5 million, on average.

The Droid launched in November with Verizon Wireless — one of RIM’s largest customers. Analysts were worried that the carrier’s heavy promotion of the device would hurt sales of BlackBerry handsets. But during a conference call Thursday, RIM Chief Executive Jim Balsillie said the carrier is still a strong supporter of the company’s products, including the newly launched touch-screen BlackBerry Storm 2.

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Open Source software has been around for a long time but really made its name in the public eye with Linux. For some, they think open source is Linux. Despite the name recognition Linux enjoys, it is still a relatively minor part of the overall computer industry, especially on the desktop side. The mobile industry though is shaping up to be quite different, and most of this has come about in just the last few years.

From the end user perspective, there wasn’t really an open source platform for devices. Sure, there was the Yopi device in the late 90’s that was based on Linux, and we can’t forget the famous Compaq iPAQ Pocket PC that had a Linux build floating around for a while. Those and other attempts to use open source to power a device for public consumption though just never took off. Until now that is. Google’s Android is, of course, open source and based on Linux. It is taking off in a big way, to the point that some people claim it will be the king of smartphones in just a few years, passing Windows Mobile, Blackberry and the iPhone.

Whether or not Android can pull that off is irrelevant. It has changed the smartphone landscape probably more than any open source project has changed any other market. HTC and Motorola have jumped in with Android devices in a big way, as have other handset makers.

That isn’t the only open source project though in the mobile device area. Funambol has profiled ten companies, without naming names, that have adopted open source for at least some of their mobile infrastructure. Obviously some are doing so just by selling an Android based device, but others are using cloud sync solutions. Funambol, in fact, is one of the providers of a server side sync solution for mobile devices. You can read the paper to get a feel for what these companies are doing, and why open source is as successful as it is for this area.

It makes you wonder why open source hasn’t taken off as well in other areas, namely the desktop. Linux is a serious contender with real market share on servers and embedded devices like firewalls and routers, but when it comes to the desktop, you’d be hard pressed to find someone running Linux on their PC in your neighborhood. You may find a few that have it installed in a virtual machine or in a multiboot situation, but probably not too many that use it exclusively, or even primarily. Even open source software such as Open Office hasn’t made too many inroads where it counts.